Income protection insurance for dentists is a type of insurance that is designed to help protect those in this profession from the financial strains of being unable to work and produce an income due to an accident, injury, or illness.
At a high level, this type of insurance protection is very easy to understand – in the event the dentists experience a qualifying condition that has left them unable to work, they will receive a monthly benefit payment that is meant to supplement the income they are not receiving.
The monthly benefits the policy holder will receive when they have a qualifying event will usually be equal to a percentage of their gross earnings from when they were working.
Regardless if the policy seeker is employed by a dental office or a private dentist, it is worth them investigating what their financial situation would be should they become unable to work and how an income protection policy may be beneficial to them to help cover expenses like bills, personal loans, and medical care.
Knowing if You Need Income Protection
When considering an income protection policy, there are two areas that should be considered – if it is possible to survive financially with a total loss of income and if it is possible, how long can it be sustained and how likely it is that an experience like this will happen.
Dentists will be able to easily find an answer to the first part of this question, based on their personal financial situation and their monthly expenses in addition to the possibility of using state aid should it be available.
For those who are currently employed by the NHS, the maximum sick pay received after five years of service would only be equal to 12 months – full pay through the first six months and partial pay through the remaining six months.
Those who have a private scheme may find that private sick pay benefits will only pay out for a short amount of time. Relying on this type of aid in the event of loss of income is not the best course of action for protecting a financial future and meeting responsibilities.
In the event there is a loss of income, it may be possible for creditors to be sympathetic to the situation but likely only for a short time – they will still move relatively quickly to have the process of legal repossessions occur in order to reclaim the assets to cover the amount of money that is owed.
In many cases, important items such as vehicles, personal belongings and even homes are taken away and sold as a means to recoup the money that is owed on personal and bank loans.
How Does Income Protection for Dentists Work?
When seeking an income protection policy, obtaining coverage is relatively easy – first decide the level of protection and the duration of cover that is desired and meets the needs of the financial assessment that was done.
Should something happen, such as a serious injury or illness that causes the policy holder to be unable to work, they will submit the request for a claim that outlines the details of the given circumstances with supporting information, such as medical reports.
Should there be enough in personal savings to cover expenses for a period of time, the policy seeker may set a deferred period for when the policy benefits will begin. After that period has ended, the beneficiary will receive monthly payouts of their benefit amount for the duration the policy outlines.
These benefits will continue until one of these events occurs:
- The policy holder recovers enough to return back to work
- The period of time the policy is outlined for expires (this is especially true for short term policies)
- The policy holder reaches retirement age
Information on Specialist Income Protection for Dentists
Depending on the nature of the occupation the policy holder has either with a private employer or the NHS, he or she may have access to sick pay benefits through the employer. In some cases, it is possible to link a personal income protection policy with the form of sick pay the employer is offering.
For example, if the employer will pay the salary for a period of six months, the policy holder may choose a deferred period of six months for personal income protection policy so the two benefits do not overlap and it is possible to extend the financial support needed.
Securing Own Occupation Coverage
When looking for income protection policies, it is important dentists choose an own occupation definition when submitting the application, given the level of skill that is needed for this occupation. Not all income protection insurance providers offer own occupation coverage, so it is very important to review the terms of all policies carefully. Choosing an own occupation definition means the insurer will pay out benefits if the policy holder is unable to perform his or her specific job.
There are lesser occupation definitions available, which include “any” and “suited occupation.” By choosing any occupation, the insurance company will only pay out benefits if the policy holder is unable to work any type of job, not just dentistry.
The suited occupation definition means the insurance company will only pay out should the policy holder not be able to perform a job that is similar to the current occupation. Own occupation, which is the recommended definition for dentists, means the policy holder will receive benefits if he or she is unable to work his or her specific occupation – dentistry.
What Options are Available for Income Protection Insurance?
When choosing an income protection policy, policy seekers should consider some of the following options before making a final decision:
- The amount of income protection that is needed in order to meet minimum living expenses, which is typically between 50 and 65 percent of gross earnings
- How long the policy will be needed to cover expenses in the event a claim is made, which will usually range between 24 months and up to retirement
- How long of a deferred period is desired, which can range anywhere between one and 12 months
- Whether or not it is needed for the policy to be indexes linked, which means the benefits that the policy payout will increase in line with inflation – this is generally recommended, especially for those opting for a longer term policy. It is important to note, however, that doing this may increase the cost of monthly premiums for the policy.
Need More Information?
Our company understands there may be a number of questions related to income protection insurance for dentists. We pride ourselves on being independent advisors, which means we are not associated with any one insurance provider, so we are well positioned to offer clients an unbiased view and advice on different income insurance policies that may be available to them.